The Parnassus Fund (MUTF: PARNX) is an IRA mutual fund that believes in second chances. It invests in companies whose stocks are undervalued because the companies are out of favor with the financial community. The fund doesn’t discriminate in that it will invest in companies of any size, whether they are well-established or small companies with market capitalizations below $1 billion.
Here are the specifics for the Parnassus Fund for today’s mutual fund spotlight:
Investing Strategy: The fund invests mainly in U.S. companies that are financially sound and have good future prospect, based on the companies’ financial fundamentals. About 98% of the fund’s assets are in stocks and the remaining 2% of assets are held in cash.
Expense Ratio: With a 0.97% expense ratio and no transaction fee, the Parnassus Fund is low to moderately priced, when compared with other funds in the large growth category. It has a Morningstar rating of four stars.
Top 5 Holdings: The top five stocks in the Parnassus Fund include semiconductor chip maker Intel Corporation (NASDAQ: INTC) at 5.34%, communications network optical subsystems and components provider Finisar Corporation (NASDAQ: FNSR) at 4.82%, Internet protocol (IP)-based networking provider Cisco Systems, Inc. (NASDAQ: CSCO) at 4.78%, financial services giant Wells Fargo & Co (NYSE: WFC) at 4.53%, technologies and software provider Hewlett-Packard Company (NYSE: HPQ) at 4.43%.
Returns: The fund’s 11.7% return over 12-months underperformed the broader market’s approximate 14% return during the period. Its 5-year return of 22.3% outperformed the Dow Jones Industrial Average’s 9% return and the S&P 500’s 1.6% return during the period.
Other Fund Statistics
- Total Assets: $549.6 million (as of 6/15/11)
- Minimum Investment: $2,000 ($500 IRA)
- Fund manager: Jerome Dodson
- Manager’s Tenure: Since December 1984
